According to Deloitte’s 2021 insurance industry outlook, technology has been vital in helping insurers shift to remote work environments and ensure employees had the tools to conduct business. Still, according to the report, “79% of respondents believe the pandemic uncovered shortcomings in their company’s digital capabilities and transformation plans…In response, 95% of those surveyed are already accelerating or looking to speed up digital transformation to maintain resilience.”
Insurance companies must acquire and deploy applications and systems that will help them accomplish their mission to manage risk for clients. That, of course, starts with first making sure their risks are minimized.
Areas of exposure
Insurance companies have realized they fall short in a few technological areas:
- Legacy administrative systems and applications haven’t kept pace with the industry and technological changes. Quite often, insurance companies built their application and system infrastructures piece by piece as new needs arose. But, in doing so, they created situations in which sometimes applications can’t communicate or work with each other. Sometimes applications don’t have enough computing power – or they have too much – to adequately do their jobs and co-exist well with other applications and systems. They also haven’t been updated frequently or well enough to handle today’s needs.
- They often don’t have the features needed to ensure complete data privacy and security. As a result, they and their clients are vulnerable to breaches, malware and other threats.
- The tech they do have either cannot or has not enabled operations to evolve. A majority of insurance companies today still have processes that are slow and labor-intensive – from policy administration to records management, and new product launches to compliance. Agents and brokers spend their time and energy on administration rather than higher-value business initiatives.
The consequences of these deficiencies can be significant. Policy renewals and other key service deadlines can be missed, leading to lost revenue. Communications with clients can be inefficient or unproductive. Agents and brokers spend their time and energy on administrative tasks rather than higher-value business initiatives. As a result of all of this, agencies and carriers are limited in terms of how much revenue they can handle, and their customer service can suffer.
What’s worse, insurance companies often don’t even know what they’re missing out on until it’s too late – after they miss a chance at a sale, or a customer has a policy lapse, or some other preventable event. These firms operate in a reactive mindset – action is taken when a customer calls with a need, or an error or opportunity is detected. Of course, ideally, they would operate more proactively.
How digital technology helps
One-stop, end-to-end applications now exist that can fill these technological gaps and bring remarkable new value to insurance companies. Capabilities include:
- Sending policies, waivers, disclaimers and any other needed paperwork to the appropriate people at the appropriate times. They also can follow up and ensure the right signatures are collected before deadlines pass. As a result, customer management and communications are essentially automated, as well as much more tailored and efficient.
- Sharing copies of documents with any other party that needs client or policy information. This saves agency and carrier administrators the time and effort they’d spend doing these jobs manually.
- Offering checklists for insurance professionals to help ensure they provide complete, thorough service and don’t miss anything important.
- Upskilling existing staff, unlocking more efficiency and enabling them to focus on high-value tasks (like sales) instead of lower-value administration. We’ve already seen many cases in which this has enabled individuals to generate significantly more revenue – which can make all the difference, especially for firms with smaller staff and client bases.
- Compliance. Applications keep detailed records of all interactions and documents, leaving a complete audit trail.
- Self-service. Some applications have enabled clients to interact directly with them and handle their own business. This saves insurance professionals even more time.
- Complete security. These applications are hosted on top cloud services like Microsoft Azure that safeguard data and promote trust.
- Performance. Being based in the cloud, these applications offer infinite scalability with guaranteed speed and support.
Put simply, all of these improvements enable insurance companies to be more proactive, deliver better customer service and compete better against other firms large and small. When agents and brokers don’t have to do reactive work, or handle administrative tasks that can be anticipated and automated, they can redeploy that time to find more customers, launch new products and do all sorts of other high-value activities. In addition, clients are happier and more loyal to their agents and brokers when they’re thinking ahead on their behalf, on top of all the details and bringing the appropriate documents and strategic recommendations to them at the right times.
Insurance carriers and agencies everywhere are in the business of managing risk, but it seems sometimes that the risk they’re the least successful at managing is their own. Digital tools are changing the game, enabling these companies to better serve clients and equipping their employees to succeed in our emerging post-pandemic world. Their long-term success depends as much as anything on how well they procure and integrate these technologies.
Source: Digital Insurance
